The bill introduces the Working Families Housing Tax Credit, a new federal tax incentive designed to encourage the construction and rehabilitation of rental housing for working families. This credit is integrated into the Internal Revenue Code as a component of the general business credit, aiming to address the housing needs of teachers, firefighters, police officers, veterans, and other hard-working Americans. It applies to buildings placed in service after December 31, 2025. To qualify for the credit, a housing project must meet specific requirements. At least 20 percent of its residential units must be rent-restricted and occupied by individuals earning 60 percent or less of the area median gross income. Additionally, 40 percent or more of the units must be rent-restricted and occupied by individuals whose incomes do not exceed a taxpayer-designated imputed income limitation, which can range from 70 percent to 180 percent of the area median gross income, with the average not exceeding 100 percent. The credit amount is determined by an applicable percentage applied to the qualified basis of the building, with minimum credit rates of 5 percent for non-Federally subsidized buildings and 2 percent for certain subsidized buildings. Projects located in difficult development areas , such as high-cost, rural, or Indian areas, may qualify for an increased eligible basis, boosting the potential credit amount. The bill also mandates that rehabilitation expenditures can be treated as a separate new building for credit purposes, provided they meet minimum spending thresholds. State housing credit agencies are responsible for allocating the credit amounts, operating under a state housing credit ceiling based on population and other factors. A portion of this ceiling is specifically set aside for projects involving qualified nonprofit organizations that materially participate in the project's development and operation. Furthermore, the state ceiling is increased by 20 percent for allocations to projects in rural or exurban areas, with an option for states to transfer some of this ceiling to the existing low-income housing tax credit program. A crucial requirement for receiving the credit is an extended working families housing commitment , which is a binding agreement ensuring the project maintains its working families status for an extended period. This commitment includes tenant enforcement rights and prohibits the refusal to lease to Section 8 voucher holders. The bill also imposes prevailing wage requirements for construction and rehabilitation work on projects receiving this credit. Housing credit agencies must develop a qualified allocation plan that outlines selection criteria, prioritizing projects with longer commitments to working families, those in areas with housing shortages, and those targeting a range of incomes or located near transit hubs. These plans must also include monitoring procedures for noncompliance. Finally, the bill authorizes $100 million for grants and below-market loans to local governments in rural and exurban areas to fund essential infrastructure projects, such as electricity, water, and roads, that support these new working families housing developments, with a priority for clean energy projects.